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In today’s world where almost everything is stored online, it seems strange for a day to go by without hearing about some kind of hacking scandal or fraudulent data breach. Protection against fraudulent charges is one of the most important considerations to consumers looking for a new credit card. But the crooks always seem to be one step ahead of the security features and many cardholders are now wondering if there is anything they can do to take the target off their backs.
Here are a few tips to consider that might help you fly under the radar of today’s cyber criminals.
Hackers Target the Elite
Although carrying a prestigious credit card may come with a long list of perks and rewards, it may also put you at greater risk for a data breach. Cyber criminals literally break the law to make a living, so they need to make sure the risk is worth the reward. Naturally, hackers prefer to target consumers with access to a lot of capital, and one indicator of how profitable a target will be is the credit card they carry. Carrying an elite credit card that comes with an extremely high credit limit like the Citi Prestige® Card or the The Platinum Card® from American Express could potentially increase your chances of having your data stolen. In fact, one former credit card thief said in an interview that American Express charge cards void of a specified credit limit are ideal targets for people stealing personal information.
More Credit is More Attractive for Criminals
No matter what kind of plastic you carry – even if it is a rather prestigious gold or platinum variety – one way to lower your profile in the eyes of hackers is to lower the amount of your available credit. When cyber crooks steal your credit card information, they typically do one of two things with it: either use it to purchase loads of merchandise, or sell the information on the black market at a set price. In either case, it is clearly more beneficial to have the information from a card with the highest possible credit limit. Information from a card with a high credit limit will sell for more on the black market and allow crooks to make more purchases before getting shut down.
If you have a credit card with a line of credit of $20,000, but you spend less than $1,000 a month on that card, for example, there is no need to have a line of credit that high. If you were to request a decrease in your credit line to $10,000, or even $5,000, it would have very little impact on your credit score, but would add an extra layer of protection from hackers who are looking to get their hands on high limit credit cards.
However, one thing you do need to keep in mind is your credit utilization ratio – which is essentially the amount of credit you are using relative to the amount that is available to you. Having credit that you do not use can strengthen your credit score, while maxing out your cards will bring your score way down. So if you are planning on lowering your credit limit to decrease your allure for hackers, make sure you’re not bringing it down so much that you’ll end up maxing out your credit cards or put your credit utilization ratio above 30%.
Additional Safeguards from Crooks
Prepaid Cards: Another way to help convince crooks that you’re not worth their time is to carry a prepaid card, which has a limit based on how much cash you deposit in your account. This way, you can load the card with funds only when you need to use it, and once the transaction is completed, your credit limit will automatically shrink. The downside of a prepaid card is that using it will not help build your credit since you’re not actually borrowing any money.
EMV Chip Cards: If you’re looking for a new credit card, be sure to check that it has the new EMV chip technology build it. Chip-enabled credit cards offer an extra layer of protection against hackers because they automatically encrypt your data each time you swipe your card. The safest, most secure credit cards also incorporate the use of a PIN code that you have to enter in order to complete a transaction.
Evaporating Credit Cards: For digital transactions – those that are conducted online or through a payment app – one of the best solutions of all is to use a credit card that can generate a temporary credit card number. The way it works is that your card company – who knows who you are and what your account information is – provides you with a temporary authorization number that you can use for a short period of time. After that, the card number becomes invalid. Even if a hacker were to steal it, it would not work because it is not connected to your actual credit card account where your information is stored.
Unfortunately, there is no guaranteed way to prevent data breaches or stop online crooks from stealing your personal information. Hackers are smart and they’re always coming up with new ways to cheat the system. However, there are certainly some steps that we can all take to protect ourselves so that we’re not easy targets. And of course, knowledge is power! So be sure to check back with CompareWallet to stay up to date on how you can further protect your credit card information and save money!